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Tenfold Growth in LTE Phones Predicted this Year

Tenfold Growth in LTE Phones Predicted this Year
By Mark Long

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The LTE phone segment is expanding at a rapid rate this year, but there undoubtedly will be growing pains for LTE, said Strategy Analytics Director Tom Kang. For example, issues such as higher data consumption fees and speed throttling as LTE users approach their monthly data caps are already giving many U.S. consumers a reason to be wary.

LTE phone shipments are expected to grow tenfold to reach 67 million units this year, with new products from Apple, Samsung Electronics, HTC, LG Electronics, Nokia, Motorola, Pantech and Fujitsu expected to drive the growth, Strategy Analytics said Friday.

"We forecast global LTE phone shipments to grow tenfold from 6.8 million units in 2011 to 67.0 million in 2012," said Strategy Analytics analyst Neil Shah. "Major countries driving LTE growth this year will include the United States, Japan and South Korea."

The mobile industry is entering a breakout year for 4G LTE technology, said Strategy Analytics Executive Director Neil Mawston. But LTE phone shipments in Western Europe will be trailing behind those in North America, Japan and South Korea in 2012, he said.

"Western European regulators and operators have been slower to free up available spectrum and slower to spot the huge growth potential of 4G technology, Mawston said in an e-mail. "For now, Western Europe will be a second-tier 4G market behind North America and developed Asia."

High-Growth, High-Value Market

Multiple operators and multiple phone vendors will be launching dozens of LTE models across numerous countries worldwide, Mawston said.. In the U.S., for example, Verizon already offers super-fast LTE service in 200 markets and expects to more than double its LTE zone coverage by the end of this year, to reach 260 million people.

AT&T's LTE service is live in 28 U.S. markets and coming to 12 more markets across the nation in the second quarter of this year. Meanwhile, Sprint expects to begin rolling out its own LTE coverage zones in selected U.S metropolitan markets by mid-2012.

Earlier this month, U.S. Cellular began offering LTE in selected metropolitan areas within Iowa, Wisconsin, Maine, North Carolina, Texas and Oklahoma. By the end of this year, the regional carrier expects to be delivering LTE service in parts of Illinois, Maryland, Missouri, New Hampshire, Oregon, Tennessee, Vermont, Virginia, Washington and West Virginia.

"LTE has quickly become a high-growth, high-value market that no operator, service developer, device vendor or component maker can afford to ignore," Mawston said.

Growing Pains

The LTE phone segment is expanding at a rapid rate this year, but there undoubtedly will be growing pains in this early phase, said Strategy Analytics Director Tom Kang. For example, issues such as higher data consumption fees and speed throttling as users approach their monthly data caps are already giving many U.S. consumers a reason to be wary about the consequences of owning and operating a super-fast LTE mobile device.

"Many LTE phones and data plans will be relatively expensive," Kang said. "Operators will need to invest generous subsidies to make 4G more affordable for subscribers."

"Meanwhile, consumers will be concerned about LTE usability issues -- such as shortened battery life, excessive device weight, or sudden bill shock caused by high data consumption," Kang said.

In the handset market overall, Strategy Analytics predicts that total global handset shipments will reach 1.8 billion unit shipments in 2012.

"Africa, Asia and Latin America will be the world's three fastest-growing regions," Shah wrote in the new Strategy Analytics report.

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